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Are you thinking about diving into the world of rentals and landlording? Or perhaps you want to grow your real estate business into new markets?
Well, if you’re looking to launch or expand your plans to build passive income using rental properties, we’ve got you covered.
See, choosing a market where landlords are properly protected is essential for making sure you don’t run into unexpected legal or financial frustrations. But there’s also benefits to consider, too, like how low-cost property taxes are.
So, read on to learn about 12 landlord-friendly states that will help you find the ideal area to put down some renting roots.
What Makes States Landlord-Friendly?
Ok, the amount of rent you can charge isn’t the only factor that determines which states are landlord-friendly. Here’s a list of things to look for when choosing landlord-friendly states:
- Evictions: In some states that aren’t landlord-friendly states, it can seem like tenants are free to stay for as long as they like regardless of whether or not they are actually paying rent. Your ability to swiftly evict an unpaying or unruly tenant is crucial. This is why eviction laws must be carefully considered when looking for landlord-friendly states.
- Landlord and Renter Rights: In a best-case scenario, a landlord will invest in one of the landlord-friendly states where landlord and tenant rights are properly balanced. No reputable landlord is asking for laws that allow them to take advantage of the people who are relying on them for a safe place to live. However, states that skew too far in favor of tenants can make it seem as though the landlord is footing the bill for the careless or criminal behaviors of tenants.
- Property Taxes: The property tax on a property is the landlord’s responsibility regardless of whether or not the property is filled. In fact, property tax can be one of the biggest landlord expenses in high cost-of-living states. But, remember that areas with high property taxes can be desirable to live in if they have strong school systems or job opportunities. Having the ability to charge more for rent can even out the extra costs for landlords to place even high-tax states on the list of landlord-friendly states.
- Licensing: A handful of states will actually require you to obtain licensing and registration before you can begin renting out a property to tenants.
- Rent Laws: If you purchase an investment property in a rent-controlled area, you may not be allowed to increase rent to keep up with inflation. Landlord-friendly states are generally ones that allow landlords to raise rates as they please.
- Competition: Some states, like California and New York, are so popular for real estate investors — both for Americans and foreigners — that competition is tough. However, there are plenty of states where there isn’t as much competition and deals are plentiful.
Why Are Landlord-Friendly States Important to Investors?
Whelp, like we’ve touched on, there are many factors to consider when choosing a state to invest in rentals.
Landlord-friendly states can protect the landlord with certain rights and laws, and some can typically be more profitable than others. You obviously want to do business in states that favor landlords over tenants, in say, the eviction process.
And who doesn’t love a lovely stream of passive income, amIright?!
So, choose the states that mitigate risk, while providing nice cash flow on your investment.
Remember, each state has its own rules and regulations. Choose wisely!
12 Landlord-Friendly States
The list of landlord-friendly states is filled with hot spots that allow landlords to cut through red tape.
Of course, it’s important to remember that you’ll also have to do research on specific property laws for any city or municipality you’re focusing on in your search for properties in landlord-friendly states.
Here’s your look at 12 landlord-friendly states for property investors (in no particular order):
1. Colorado
The Rocky Mountain state isn’t all that rocky for landlords. What puts Colorado on the list of landlord-friendly states is a speedy eviction process that allows landlords to evict tenants in 3 days for unpaid rent.
Colorado also lacks restrictions on the size of the security deposit you can request. Additionally, this state that’s known for fresh air and amazing views does not have rent-control laws. But, some cities in Denver do require landlord licenses before you can rent a property for more than 30 days at a time.
2. Alabama
Alabama should be on every investor’s list of landlord-friendly states because it has the nation’s lowest property tax collections per capita. With property tax totaling just a few hundred dollars per year on most properties, Alabama is definitely one of the most landlord-friendly states from a financial perspective.
Low housing costs also help investors grab properties for much less compared to most other markets around the country. Another perk to becoming a landlord in Alabama is the state’s prohibition of any form of rent control. The state doesn’t have any requirements for landlord licensing. Finally, the eviction process is fairly smooth for landlords in Alabama, as long as they provide the 7-day notice required by law before beginning a legal eviction.
3. Louisiana
As one of the best landlord-friendly states, Louisiana comes in right behind Alabama for having some of the lowest property taxes in the country.
People in the property world also know Louisiana for its lightning-fast eviction process that can be completed in just 2 to 4 weeks for most landlords. The Pelican State also lacks any laws requiring rental licenses.
4. Nevada
While Nevada may be desert country, it is far from a desert when it comes to investment opportunities if you’re looking for landlord-friendly states. What makes this such a landlord-friendly spot is its combination of lower property taxes, robust landlord-tenant laws, and general lack of rental control.
In Nevada, a landlord is legally permitted to use a security deposit to cover any damages exceeding reasonable wear and tear. The average tenant eviction in Nevada is completed in just 5 to 6 ix weeks.
5. Florida
The demand for rentals may seem like the obvious reason why this sunny state makes the list of landlord-friendly states.
While the state’s rising population is certainly one of the reasons why this is a landlord-friendly choice, Florida also has robust landlord-favoring laws. For example, this is one of the only states where a landlord only needs to provide a 12-hour notice before they are allowed to enter an occupied rental property.
6. Michigan
While Michigan may feel like a “sleeper” choice compared to picks with ultra-low costs of living, it ranks on the list of landlord-friendly states thanks to its lax rental laws.
Michigan’s tenant laws even favor landlords by allowing them to make lease adjustments as long as they provide 30-day notice. The shortage of housing affecting Michiganders right now also makes this an interesting time for investors looking to help fill the gap.
7. North Carolina
North Carolina shoots to the north of any list of states that are landlord-friendly because landlords here don’t need to provide any notice for evictions triggered by lease violations.
A short 10-day eviction notice is required for all other reasons. North Carolina is also a state with low property taxes and no rent control.
8. Wyoming
Wild and free Wyoming makes the list of landlord-friendly states because of its pro-landlord stance on security deposits.
In Wyoming, landlords can keep any security deposit to cover unpaid damages or rent without giving the tenant an option to fix the violation. An eviction in Wyoming often takes just 3 weeks.
8. Texas
Texas offers very landlord-friendly laws, and there’s a lack of statewide rent control.
The eviction process is relatively straightforward compared to some other states, where it may take months, or longer, to evict a tenant. It generally takes 4 weeks to evict a tenant in Texas.
9. Georgia
Georgia offers an efficient and straightforward eviction process, absence of rent control laws allowing landlords flexibility in setting rental prices, and an emphasis on property rights through regulations that grant landlords reasonable control over their properties.
The state’s quick resolution mechanisms for landlord-tenant disputes, including eviction cases, can save time and resources for landlords compared to states with more complex legal processes.
10. Ohio
Ohio offers a legal framework that generally favors property owners. The state has laws that provide landlords with reasonable control over their properties, allowing for an efficient eviction process and relatively straightforward procedures.
Additionally, Ohio does not have rent control laws at the state level, giving landlords greater flexibility in setting rental prices without government-imposed restrictions.
11. Indiana
Indian has relatively straightforward eviction procedures, allowing landlords to regain possession of their properties efficiently in cases of nonpayment or lease violations.
The state also lacks statewide rent control, providing landlords with more flexibility in determining rental rates without government-imposed restrictions.
12. Idaho
The absence of maximum limits on security deposits and late fees is notable in Idaho, and tenants are only permitted to withhold rent for necessary repairs.
Combined with no rent control, low property taxes, and low price of entry, Idaho is a great choice for landlords.
Wrapping Up: Landlord-Friendly States
Choosing where you buy an investment property is an important decision — don’t take it lightly, ok?!
There are plenty of states with too many regulations and rules, not to mention costs.
But, as we’ve just touched on, there are also plenty of states with landlord-friendly policies.
As you embark on this interesting real estate niche, look at states with fewer regulations, lower taxes, and more landlord-friendly policies.
And, we’ve given you a great place to start from… well, actually 12 great places! Where will your landloring journey begin?!
